is it always happened while US was ruled by PRESIDENT that like to make wars ?

A very interesting point.

The answer is more to do with currency devaulation combined with a war that is not affordable.
The Great British Pound suffered the same in the 60's-70's with a currency devaluation and a war in Palestine that the UK could not afford.
Also the UK finished paying the US their 40-80 billion a year? for the second World War last year or the year before so US income has fallen substantially.

__________________
Keep in mind that neither success nor failure is ever final. --Roger Babson (1875-1967)
YTD +5%

Do you think continued euro stretch does not concern Trichet? Well, time will tell.

It is only matter of time before it starts affecting the Eurozone economic data. I took my first short here

He has never said that the Euro is over valued- probably won't until it hits 2.20 ish only the pace of the rise- but it will only get faster from here on in.

__________________
Keep in mind that neither success nor failure is ever final. --Roger Babson (1875-1967)
YTD +5%

All thoughts are appreciated, but intervention alone wont do the trick. Its need to be accompanied by a statement by the FED, something like: "We have been wrong in lowering rates too much too fast. From NOW on low inflation will be our main goal. Lower growth will be taken for granted, since the most important thing is to secure the future value of our currency. Especially since so many countries and individuals rely on the dollar for their future income. We cannot walk away from them since they have been investing in our nation for many years. Apologies for letting things getting out of hand so long".
Now this would mean commodoties would not rise just because its a hedge against a lower dollar. It would mean oil nations would not see the urgent need to diversify, it would mean that the ECB could eventually lower its rates, and it would that the purchase power of your future receivables is guaranteed.
Ofcourse it would mean an ugly period for the U.S. consumer. Sorry for that, guys.
These are just some thoughts of mine, looking at it from the other side of the ocean.
Good luck.

Which candidate would the markets respond to most favorably? Thats funny you whould say that because yesterday I was thinking the only way to get the dollar up would be to bomb europe China and Japan.LOL Bush got his oil prices up for when hes done! Gota go 50% fib just called 1.5610!!!!! Hear we go!!

What I forgot. Yes, short term it looks very much overdone, this euro rally. Time for some downward correction. We'll see whether that will be 1,53 and up again, or breaking through 1,5150 and into the 1,4's.
Good luck.

Well, I am adding to shorts from now on, and If it's going go to 1.60 -- Welcome I'd appreciate another short there.

It just does not convince anyone that a pair will rally from 1.30 to 1.60 straightforward, and huge divergence / overbought readings are all over the place. But let me say, no one will realize that euro went too high until it reverses suddenly on the long positions.

And I've seen this a lot before, so I can deal with the drawdawn in the short term. Once all traders agree that nothing will stop the euro and it is going to hit the roof, it will start reversing ugly. This is the psychology of the market.

Anyway, Good luck

Top or not top? that's the question...!

and "... hopefully Democrats will win... I wanna go home..." LOL...

The next Fed Meeting could bring a big surprise. Perhaps, they elect NOT to lower rates by as much as anticipated. Then what? Will the FX market interpret that as the turnaround point? Will that be the catalyst that puts the lid on the falling dollar?

I'm not the expert here. I'm just trying to put out some ideas and air out some of the things that go on around in my head. :-)

I do agree with some of the comments that perhaps the falling dollar has been arranged by the Fed in the first place. But, on the other hand that may be giving more credit than is due. That would have taken quite a bit of long term thinking. I'm not sure if our "leaders" have such ability. It might be that the market was taking us that way anyway and at some point someone came up with the idea that maybe it would work in the US's favor so they went along with the inevitable.

There are many factors that have contributed to the weak dollar. But, like most commodity markets eventually the move feeds on itself for no logical reason and then ends with the classic "spike" blow off top that Jamie talks about. We may be at the end of that cycle now. It is always hard to tell when you are in the midst of the action.

It would be a big suprise, the FED not cutting. It would certainly hit Wall Street hard initially, and Wall Street basically runs the FED, so.....
Talking about intervention........Central Banks know their markets. It would be nice to do it now with technical indicators calling for a firmer dollar. They just need to give it a small push. But........ putting a line in the sand means they must stay put and do not walk away from it anymore. That could be very costly. Something else needs to be done too. A lower oil price would help, but how to achieve that?
It's getting to complicated for me. I'll just start buying and selling and hope to gain some points.
Good luck!

Actually, with G7 close, there will be fear to drag usdjpy below 100-- Thus, I can say that G7 is the catalyst for the dollar recovery even if "short-lived".

If euro continues higher, G7 will discuss this probably.

Fed wanted a weaker dollar, not a damaged dollar. The continued one-way exchange rate movement can't survive for long. Hence I booked the first tiny profit on shorts, looks like its finding bids 1.5550 for now.

But fib support should be strong near 1.55 so I will exit there and wait.

Anybody around with a nice short-term chart of EUR USD with EW points in it? I have difficulties identifying the i, ii, iii's.... I ordered a book, but it has not arrived yet....
Thanks in advance.

The Euro will rise to 1.60, especially if the Fed cuts again. At this rate, 1.75 EUR by summer is becoming quite possible. The Fed should NOT cut interest rates any further. In fact, the rates must be raised to defend the dollar. It is interesting to see the response from Benranke when questioned by US rep. Ron Paul. He is unable to answer his questions.

http://www.infowars.com/?p=490